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Why Do I Need A Probate Valuation?

The process of probate valuation is relatively straight forward; the purpose is to ascertain the total value of the assets held in the estate. There are a number of reasons why this has to be done. In the first instance, if it has not been previously worked out, a probate valuation will show whether or not Inheritance Tax (IHT) will be payable on the estate and, if so, how much will be charged. This can be hugely important as it may have a significant impact on the eventual sums passed to beneficiaries.

Furthermore, according to probate law executors are likely to find that their powers of administration are limited until a percentage of any IHT owing has been paid. As such, it is important that probate valuation occurs quickly in order to ensure that the rest of the probate process can continue.

Another frequently overlooked purpose of a probate valuation is to ascertain whether or not any capital gains tax (CGT) will be payable on disposals of assets by the executor. If the executor is required to sell part of the estate, it is likely that some CGT will arise. CGT is levied when assets have increased in value between the point at which they are acquired and the point at which they are disposed of.

This can often represent almost as significant an outlay as Inheritance Tax, and it is therefore important that the implications of this charge are understood. Furthermore, a probate valuation will ensure that the beneficiaries are aware of the value of the assets that they will inherit. This is important from the beneficiaries’ point of view, not least because it will allow them to plan for their own CGT liabilities if they choose to dispose of their inherited assets in the future.

A probate valuation must consider the value of all and any assets to which the deceased individual held the legal title. Some assets are easy to identify, for example houses. The ‘moveable estate’, however, can be more difficult to locate and value; this includes assets such as money and some personal possessions. Finally, it is important to remember that joint ownership of property will have an impact on the probate valuation. If the deceased individual held joint title to any assets, for example a house, their share of the value must be considered. Probate valuation can be a complex process and, while it is possible to do it yourself, many people choose to employ a professional. Professional probate valuation is generally charged as a percentage of the value of the estate. If you are considering using such a service, it is worth doing some research to ensure that you are getting an acceptable deal.

Coram James is a firm of professional probate valuers and offer a comprehensive probate valuation service for solicitors, executors and members of the public in London and throughout the country.

Our expert probate valuers will guide you through the probate valuation process and will provide you with a written probate valuation, (Estate Valuation Report) in accordance with S.160 of the Inheritance Tax Act (1984).

It is important to establish the probate value of an estate and chattels, and our probate valuation reports will assist in the winding up process. The members of our probate team are all art and antique valuers with many years providing estate valuations for inheritance tax purposes. Our art and antique valuers all have experience at both Sotheby’s and Christie’s auctioneers and value all the fine and decorative arts, including: antiques, modern furniture, modern and contemporary art, silver, jewellery, carpets, ceramics and books. Consultants are available for specialised areas such as wine and stamps.

Coram James are members of The Royal Institution of Chartered Surveyors (RICS) and the National Association of Valuers and Auctioneers (NAVA).

When the contents or chattels have little or no value, our probate valuers will provide a written probate valuation to reflect this, ensuring items are not over or undervalued.